nep-fle New Economics Papers
on Financial Literacy and Education
Issue of 2022‒09‒12
five papers chosen by
Viviana Di Giovinazzo
Università degli Studi di Milano-Bicocca

  1. Digital financial inclusion By Ozili, Peterson K
  2. Does State-Mandated Financial Education Reduce High School Graduation Rates? By Urban, Carly
  3. Refinancing Inertia in the Irish Mortgage Market By Devine, Kenneth
  4. Platforms, Tokens, and Interoperability By Markus Brunnermeier; Jonathan Payne
  5. Inclusive Welfare: On The Role of Islamic Public-Social Finance and Monetary Economics By Juhro, Solikin M.; Syarifuddin, Ferry; Sakti, Ali

  1. By: Ozili, Peterson K
    Abstract: The paper defines digital financial inclusion, and highlights the goal of digital financial inclusion, the components of digital financial inclusion, the providers of digital financial services, the instruments for digital financial inclusion, the benefits of digital financial inclusion, the risks of digital financial inclusion, and the regulatory issues associated with digital financial inclusion. It also suggests ways to make digital financial inclusion work for the good of all. The paper concludes by offering some implications for policy making and practice in the digital finance ecosystem.
    Keywords: digital finance, artificial intelligence, financial inclusion, digital financial inclusion.
    JEL: G21 G23 G28 I31 I38
    Date: 2022
  2. By: Urban, Carly (Montana State University)
    Abstract: Concerned about low levels of financial literacy among teens and the importance of their looming financial decisions as emerging adults, state policymakers have expanded high school personal finance graduation requirements. Did these added requirements create an additional barrier for students? Comparing students in states with and without standalone personal finance course requirements before and after the requirements went into place, there is no evidence that these requirements reduced graduation rates overall, by race, by gender, or by family income. Existing research quantifies improvements in debt and credit behaviors, and these findings suggest there are not simultaneous adverse effects overall or for at-risk students.
    Keywords: high school graduation, personal finance, financial education
    JEL: G53 D14 I24
    Date: 2022–06
  3. By: Devine, Kenneth (Central Bank of Ireland)
    Abstract: Mortgage refinancing is a key household financial decision, with those who fail to refinance losing out on substantial monetary savings. Using a loan level dataset of Irish mortgages, this paper estimates that approximately 67% per cent of unconstrained borrowers did not take up a cost free refinancing offer from their financial institution when it was optimal to do so. I estimate average borrower foregone savings to be €5,400 over the remaining term of the mortgage. This represents a significant household financial mistake, particularly for vulnerable cohorts. I explore the role of borrower and mortgage characteristics, with the presence of financial distress acting as a primary factor in the low levels of engagement.
    Keywords: Mortgages, Refinancing, Household Finance.
    JEL: D10 D14 G21
    Date: 2022–06
  4. By: Markus Brunnermeier (Princeton University); Jonathan Payne (Princeton University)
    Abstract: Digital money requires a ledger. By integrating this ledger with its other ledgers, a platform can enforce repayment of uncollateralized credit, beyond the ability of the banking sector. However, by controlling interoperability to other platforms’ ledgers, an incumbent platform can “lock-in†customers and increase its market power. Open banking, which gives users control of interoperability, limits uncollateralized credit. Introducing CBDC as digital legal tender (on an isolated ledger) hurts credit extension, but enhances it when combined with an open architecture public ledger as a “smart CBDC.â€
    Keywords: Tokens, ledgers, interoperability, smart contracts, platforms, open banking, open architecture, financial inclusion, “smart CBDC†, “PlatFiâ€
    JEL: E50 E59
    Date: 2022–06
  5. By: Juhro, Solikin M.; Syarifuddin, Ferry; Sakti, Ali
    Abstract: The concept of inclusive economic development has gained traction among researchers due to the failure of old concepts to solve poverty and social inequality. Shifting of the economic development is needed, from the focus on good and service value to increasing economic participation of communities. To shed a light on the solution, this study aim to examine the lesson learned from Islamic social-public finance and monetary economics role in realizing inclusive welfare. Based on in-depth observation, we found that economic inclusion and inclusive growth are fully in line with the spirit and goals of the Islamic economy in terms of creating equitable welfare for all. There is also an existing linkage between the role of Islamic social-public finance and monetary economics.
    Keywords: Islamic economy, Public and social finance, Monetary economics, Economic development, Inclusive welfare
    JEL: D63 E50 H50 O10
    Date: 2022–03–01

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